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I'm a Canadian living in Canada and I've recently started a new contract with a client in the US. My previous contract specified payment in CAD while my new contract is in USD. I invoice once a month and they wire the amount to my Canadian bank account. Under the new contract they'll convert to CAD at the current exchange rate and send that.

How should I track this in GNUCash? My existing set up involves three accounts (Income, A/R, Bank) all denominated in CAD.

I'm pretty sure I need to have a new A/R account in USD to allow for USD billing. But do I need a USD income account or should I leave that in CAD and specify an exchange rate with each invoice and if so which exchange rate should I use? (ask, bid, etc) The USD income account is simpler as I only need to deal with exchange rates when recording the payment but since I need to report my income to CRA in CAD I suspect I need to keep all income accounts in CAD.

  • Did you ever find a solution to this in GnuCash - or at least how you made it work? Might be worth putting that in here as an answer (and accepting it) for posterity. – verdammelt Feb 22 '15 at 16:34
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The solution I've come up with is to keep income in CAD, and Accounts Receivable in USD. Every time I post an invoice it prompts for the exchange rate.

I don't know if this is "correct" but it seems to be preserving all of the information about the transactions and it makes sense to me. I'm a programmer, not an accountant though so I'd still appreciate an answer from someone more familiar with this topic.

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It depends upon in how many currencies your business is denominated.

If your business is solely dependent upon this one payer, it's best to start up a new set of books in USD. All accounts should be translated from CAD from a date preceding the USD activity. The CAD books should be closed, and all should be done with the new USD books.

If your business will continue to use both USD & CAD, it's best to have two sets of books, one for USD and one for CAD.

Multi-currency books are a nightmare and should be avoided at all costs.

Also, with the way you describe your situation, it appears as if you're also blending your household and business books. This should also be avoided for best practices.

  • I'd appreciate knowing why whoever voted this down did so. – smithkm Aug 12 '14 at 1:51

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